American private equity giant Silver Lake Partners has bought stake in Jio Platforms for Rs 5,655.75 crore in a deal that values the digital unit of Reliance Industries Ltd (RIL) at Rs 5.15 lakh crore.
The deal comes less than two weeks after Facebook spent Rs 43,574 crore ($5.7 billion) to buy a 9.99 percent stake in Jio. That deal valued Jio at Rs 4.62 lakh crore ($65.95 billion). The Facebook-Jio deal was the social media network’s biggest since the $22 billion buyout of WhatsApp in 2014.
RIL said, "This investment values Jio Platforms at an equity value of Rs 4.90 lakh crore and an enterprise value of Rs 5.15 lakh crore and represents a 12.5% premium to the equity valuation of the Facebook investment announced on April 22, 2020."
Silver Lake shot into prominence after acquiring PC maker Dell Inc along with Michael Dell in 2013. It is a global leader in technology investing, with over $43 billion in combined assets under management and committed capital and a team of approximately 100 investment and operating professionals located around the world in Silicon Valley, New York, Hong Kong and London.
Launched in 1999 as a specialist firm focused on technology company investments, Silver Lake has maintained a strategic discipline since its founding and engages in a synergistic and collaborative approach to investing across investment strategies, the company's website said.
The fund has three investment strategies:
- Silver Lake Partners (SLP) engages as a strategic market participant via large-scale investments in technology, technology-enabled and related growth businesses.
- Silver Lake Alpine (SLA) targets structured equity and debt investment opportunities in large-cap technology, technology-enabled and related growth businesses.
- Silver Lake Waterman (SLW) offers flexible growth capital to later-stage private companies in the technology, technology-enabled and related growth industries.
On April 22, Facebook bought 9.9% stake in Jio Platforms for Rs 43,574 crore. That deal valued Jio at Rs 4.62 lakh crore ($65.95 billion).
Key things to know about Silver Lake:
- Silver Lake made its debut investment in India in 2013 when it picked up a minority stake in Bangalore based Ekta Software which builds software for commodity trading.
- The firm was launched in 1999 as a specialist firm focused on technology company investments.
- It’s portfolio of investments collectively generates revenues of more than $204 billion annually.
- Its portfolio includes Twitter, AirBnb, Alibaba Group, Ant Financial , Didi Chuxing , Motorola Solutions and City Football Group.
- It sold Skype to Microsoft for $8.5 bn in 2011 in one of the most successful private equity exits in history.
Since its launch three years ago, Jio, led by billionaire Mukesh Ambani, has grown at a sprinter’s pace to become India’s largest telecom company. It has accumulated some 340 million customers through a barrage of innovations, including offering cut-throat mobile internet prices and a diverse suite of products and including chat services, movies, games and music.
The deal will help reduce RIL’s debt burden, which bulged due to the breakneck expansion of Jio and other businesses. Ambani invested around $40 billion to launch Jio in 2016. RIL is also the largest retail player in India thanks to a series of aggressive expansionary moves into consumer-facing businesses such as e-commerce and grocery.
On April 30, Reliance Industries said it will achieve zero net debt status ahead of schedule, as it announced its quarterly and annual results.
In addition to the investment by Facebook, the company said, it has received strong interest from other strategic and financial investors and is in good shape to announce a similar-sized investment in the coming months.
Follow our complete coverage of the Jio Silver Lake coverage here.
Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.
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